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Early Start with John Berman and Zoraida Sambolin
Long-Range Patriot Missile System To Bolster Ukraine Air Defense; Netanyahu Forms All Male, Right-Wing Orthodox Coalition; Tesla Stock Plunges As Investors Fear Twitter Dramas. Aired 5:30-6a ET
Aired December 22, 2022 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT (voice-over): Which have had to contend with repeated Russian barrages of drones, missiles, and more.
The Patriot batteries will fit like an extended dome over Ukraine's current systems. Patriots can have a range of 40 miles or more and the radar can detect threats even farther away -- a long-range air defense capability, which Ukraine has requested for months. Below that are systems like the U.S.-provided NASAMS with a range of 25 miles -- a medium-range system that's proven very effective. And then, there are the short-range options, like Stingers, that Ukraine has used as well.
MARK CANCIAN, SENIOR ADVISER, CSIS INTERNATIONAL SECURITY PROGRAM: Patriots are significant politically and useful militarily, but they're not a game-changer.
LIEBERMANN (voice-over): This is a high-end system. Missile experts say a Patriot battery with missiles costs about a billion dollars, so Ukraine shouldn't use these to take out relatively inexpensive Iranian drones.
The system itself has six major parts, according to the Center for Strategic and International Studies -- a control station, a radar set, a generator, an antenna, and, of course, the launcher and missiles. It takes about 100 personnel to operate a full system.
Nearly 20 countries have Patriot missile batteries. Israel has used them to intercept drones and even Syrian aircraft. Saudi Arabia has effectively used Patriots to intercept ballistic missiles and more from Yemen.
CANCIAN: I think the system will work against a wide variety of Russian threats. This is by far the most complicated system that we have given to the Ukrainians.
LIEBERMANN (voice-over): But complete training on Patriot batteries takes weeks, if not more, and time is one luxury Ukraine does not have. LIEBERMANN (on camera): Pentagon officials say it will take several months to train up the Ukrainians on how to operate the Patriots. They'll try to compress that timeline as much as they can but it is a complex system. And I think we're about to find out if it's even possible to compress it beyond several months.
I also wouldn't overlook the other capabilities in this $1.8 billion Ukraine assistance package. More of the HIMARS ammunition that they've used so effectively, more vehicles, precision-guided bomb kits -- JDAMs, in military terminology -- that will allow the Ukrainians to carry out bomb emissions from fighter jets. They'll have some technical know-how that they'll have to implement to make that work on their Soviet-era fighters. But they've done that before and I think there's no doubt they'll do it again.
One final note on this package. There is a lot of non-NATO-standard artillery ammunition in here. Why is that significant? The U.S. doesn't produce that, so that's being sourced from elsewhere. That would go to the tubes and the artillery, the ammunition, the weapons that Ukraine already has that will help them with the systems with which they are already familiar for what is still a punishing ground battle.
Oren Liebermann, CNN, in the Pentagon.
CHRISTINE ROMANS, CNN ANCHOR: All right, Oren. Thank you for that.
The stage is set for former Israeli Prime Minister Benjamin Netanyahu to return to power. Netanyahu announcing he formed a coalition government, beating a deadline by just minutes. The new government will likely be the most right-wing in Israel's history.
CNN's Hadas Gold is live in Jerusalem. What else do we know about this new coalition government?
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Well, Christine, Netanyahu and his allies did much better in the November first elections than the polls were indicating.
And he sounded confident that he and his right-wing allies would be able to form a government within a week or two. But then it took weeks and days of wheeling and dealing and trying to hand out all these different portfolios and he took it up until the wire. His deadline was midnight last night just minutes before he did finally inform the Israeli president that he had managed to form a government.
But it's a government that's causing Israel's allies, including the United States, to brace themselves for what's ahead. Here's why.
GOLD (voice-over): The new Israeli government setting off alarm bells around the world -- even allies wearily eyeing Benjamin Netanyahu's new ministers who will make up the most right-wing government in Israeli history, a stark change from the last coalition, now made up all of men and all Orthodox, except for Netanyahu himself.
Most recognizable is Itamar Ben Gvir, once convicted of anti-Arab racism and supporting a Jewish terrorist group, now national security minister in charge of Israeli police.
Eager to allow Jews to pray at Jerusalem's holiest site where only Muslims are now allowed to worship. A place that has sparked intifada and even wars.
Former Israeli ambassador to the United States Danny Ayalon warning Washington will be on high alert.
DANNY AYALON, FORMER ISRAELI AMBASSADOR TO THE UNITED STATES: If they will perform what is conceived in Washington as provocations. For instance, a change of status in (INAUDIBLE) or unchecked enlargement of new settlements. This could be a very, very big problem for Netanyahu and for the government.
GOLD (voice-over): Then there's Bezalel Smotrich, another far-right settler-lawyer turned politician, has been named minister of finance and has also been given power to appoint the head of the Israeli body which controls border crossing and permits for Palestinians. Smotrich supports abolishing Palestinian authority and annexing the West Bank.
Israel's staunchest ally, the United States, perhaps hoping the rhetoric won't match the actions.
ANTONY BLINKEN, U.S. SECRETARY OF STATE: We will gauge the government by the policies it pursues rather than individual personalities.
GOLD (voice-over): Other appointments causing uproar include a gay rights opponent who has vowed to ban pride parades to a position in the education ministry and proposed changes to the law of return for the restricting who was considered Jewish enough to be permitted to emigrate to Israel.
Netanyahu, for his part, has repeatedly claimed that the buck will stop with him.
BENJAMIN NETANYAHU, FORMER ISRAELI PRIME MINISTER: I've had such partners in the past and they didn't change an iota of my policies. I decide the policy with my party.
GOLD (voice-over): But as the government has taken shape, his critics, like this cartoonist, say he is creating a monster he won't be able to control.
GOLD: And Christine, Netanyahu actually still has a few hurdles before his government is sworn in. Namely, they need to pass three bills that will actually allow three of their ministers to take over, one of which is actually a bill that will allow one man to become a minister -- Aryeh Deri -- and that's because he was previously convicted of tax offenses. They need to pass a special bill that will allow him to take power as a minister.
But if all goes well, they are expected to be sworn in and Benjamin Netanyahu will become prime minister once again in just about a week, Christine.
ROMANS: All right. Thank you so much, Hadas Gold -- fascinating.
All right, quick hits around the globe right now.
Eight teenage girls who met on social media charged with murdering a 59-year-old man in Toronto. Police call the stabbing death a swarming attack. No word on a motive.
U.K. medical officials telling the public not to get so drunk that you need an ambulance after paramedics joined the picket lines Wednesday. It follows strikes by nurses and railway workers.
Germany returning 20 ancient sculptures to Nigeria that were stolen by British colonial troops 125 years ago. It's the first step in a deal to give back about 1,100 bronzes housed in German museums.
Ahead, new rules in the works for your 401(k) retirement plan. And Elon Musk's Twitter distraction. That's just one of the growing list of problems facing Tesla.
ROMANS: Tesla, once a darling of Wall Street with a cult following from electric vehicle fans, now a big loser this year. Its shares down 65 percent this year. Tesla's shareholders increasingly concerned its chief executive Elon Musk is distracted, making daily headlines on Twitter.
To sum it up, Dan Ives from Wedbush Securities, wrote this. Quote, "This has been a black eye moment for Musk and been a major overhang on Tesla's stock which continues to suffer in a brutal way since the Twitter soap opera began with brand deterioration related to Musk a real issue."
Let's bring in Dan, managing director and senior equity research analyst at Wedbush Securities. So nice to see you this morning, Dan.
You also wrote Musk is Tesla, Tesla is Musk. Twitter is a private company. But Twitter's chaos has become a Tesla story, hasn't it?
DAN IVES, MANAGING DIRECTOR AND SENIOR EQUITY RESEARCH ANALYST, WEDBUSH SECURITIES (via Skype): Look, it's been a -- just a brutal spiderweb. It's really, ultimately, a twilight zone since Musk started this in April, but especially since he bought Twitter in late October. This has just been a black cloud over the Tesla story because Tesla is 90 percent-plus of Musk's wealth and he's essentially using Tesla right now as his own personal ATM machine to fund Twitter. That's why it's been a debacle of epic proportions.
ROMANS: Yes. He said no more sales of Tesla way back in April I think. And, what, two or three times since then he's had to sell Tesla shares to turn around and fund this purchase, right?
IVES: It's the boy that cried wolf. And ultimately, for Musk -- I mean, if you look at Tesla, Tesla's been unrivaled in terms of its success in electric vehicles. And Musk really has been Teflon-like. This has really been a Cinderella story. But now, because of the Twitter situation, it's been a black eye for Musk and a black eye for Tesla.
And finally, I think the clock struck midnight for investors that just cannot take any more, and that's why there's more and more pressure for Musk to leave the CEO role --
IVES: -- of Twitter because of the situation.
ROMANS: Yes -- get back to focusing on Tesla -- which, obviously, this has been a down year for automakers and it's been a down year for stocks. But Tesla is down way more than the rest of the market or the other automakers.
And he was trying this week, I think -- via Twitter, of course -- to explain kind of why his stock was down using like the Fed and macroeconomic factors as sort of an excuse. What do you make of that?
IVES: Look -- I mean, when you give him a mic like that he just creates more of a hole, and I think that's what we're seeing play out on Twitter. The more he tweets, the more controversy. And I think that's really been the problem for investors. Where on Wall Street, he's essentially gone from a superhero to a villain because of what we've seen play out -- because of the Tesla frustration.
Because look, you're talking about one of the most successful companies -- but Musk self-inflicted -- I'd say, 75 to 80 percent of the sell-off is Musk Twitter-driven.
ROMANS: Musk risk.
OK. So, Twitter users voted for him to resign. Now he's saying he's going to find a successor before resigning. Who could run Twitter, and will that satisfy shareholders at Tesla who are losing trust?
IVES: Well, I mean, there's two problems. One is OK, is that going to be a figurehead? Is it just a yes person?
Now, of course, the Sheryl Sanbergs and Marissa Mayer -- you know, that top-tier list -- that would be significant. But do they take that job? I mean, this is a job with massive risks.
And then at that point, for Musk, is he still going to have to fund the Twitter Reddit because his advertisers leave? That's that spiderweb where he has to sell more Tesla stock. This is the moment of truth for Musk over the next four to six weeks. Also, does he go through with it? You know, as we've seen with it, that's been the boy that cried wolf worry.
ROMANS: From hero to villain on Wall Street.
Dan Ives, thanks for getting up early for us this morning. Thank you.
IVES: Thank you.
ROMANS: All right, see you later.
Still ahead, the Biden administration's remedy to combat an early and severe flu season. And bundle up -- or better yet, stay inside. Dangerous weather before Christmas in almost every state.
ROMANS: All right. Your Romans' Numeral this morning is 46 percent -- 46 percent. That's how much the average Social Security benefit fell short this year to cover retirement.
The average Social Security retiree benefit has increased more than $90 a month from last year -- adjusted for inflation, of course. Research shows a bigger increase was needed every month to keep up with surging inflation this year. We'll talk more about retirement and your 401(k) in just a moment.
But looking at markets around the world right now, Hong Kong's Hang Seng up nearly three percent. China signaling more pro-growth measures to help stimulate an economy strangled by COVID-19 lockdowns. In the U.K., the economy shrank again in the third quarter -- the worst performer in the G7.
On Wall Street, stock index futures right now just down a little tiny bit after a big day yesterday. A strong reading on consumer confidence launched stocks higher. The Dow up 525 points. Also, strong quarterly earnings from Walgreens and Nike. The Nasdaq and the S&P 500 finishing the day up more than one percent.
But home sales in the -- in the U.S. fell again -- 10 months in a row -- because mortgage rates are scaring prospective buyers.
On inflation watch, gas prices fell a penny overnight, now at $3.10 a gallon.
Jobless claims and a revision to GDP in the U.S. due out later this morning. We'll be on that on "CNN THIS MORNING."
All right, Congress is on the brink of passing a bill that could make it easier for Americans to save for retirement with their 401(k) plans. The changes include raising the age people are required to start withdrawing money from 72 to 75. Increasing contribution limits for older workers. And increasing incentives for people with low and moderate incomes to save in their retirement accounts.
Let's bring in Doug Flynn, partner and co-founder at Flynn Zito Capital Management and an old friend of mine. Hi, Doug.
DOUG FLYNN, PARTNER AND CO-FOUNDER, FLYNN ZITO CAPITAL MANAGEMENT, LCC (via Webex by Cisco): Hi, Christine. How are you?
ROMANS: A young friend of mine -- let's be honest. But, yes, we've been doing this a while together.
All right, this new bill --
ROMANS: -- looks like it's working its way through Congress. It's going to raise that mandatory age to start taking withdrawals to 75 starting in the year 2033.
How would this benefit -- how are some of the ways this could be good for saving for retirement?
FLYNN: Well, what we do know is about half the people in the United States don't save enough for retirement. So what it does is it gives them a little bit longer to let the money grow before they -- before they have to take it. It actually goes to 73 -- age 73 in January if this passes. And then it takes about 10 years to let it go to 75 before they have to take withdrawals.
But what also happens is most people need the money before those ages. So, while it's nice if you don't need the money, the vast majority of people actually do need the money and begin taking it before this.
So it helps those people who have maybe too much, but it doesn't certainly help everybody as far as the deferral of the required distribution is concerned.
ROMANS: Yes. It's not law yet but it looks like it's winding its way along that -- along that bumpy road. So we'll see where it ends.
We are near the end of the year. What's on your smart investor to-do list before the new year begins?
FLYNN: Well, you know, a lot of people have told me that they haven't looked at their investment statements for a while because this year has been pretty straight down. But, you know, the last two months it's actually picked back up.
And one of the things that we're recommending and a lot of things that we're doing is if you haven't looked at your statements for a while you need to get in there and take a look at them. Not your retirement account statements. Those are long-term. But your non-tax -- your non- deferred statements.
Chances are you have some gains, perhaps, in there and you might have some losses on some of the investments that you have. And what you need to do -- before the end of the year you have to do this -- is if you have any losses, just move them from what you have as a loss into something else. Keep it invested, but just move it.
Book that loss. It will help you in your taxes that you're going to have to pay, either if you're paying quarterlies in January or certainly, when you're filing taxes. A lot of people are ignoring that. One of the things you want to do is get in there.
Look, if you have losses, you have losses, but book them and turn them into a positive by booking that capital loss and that will offset some of the gains. And you really just need to have a good understanding of what do I have right now. It's a better time to look at it than it was a couple of months ago. But just take a look before the end of the year for sure.
ROMANS: All right. What should you not be doing?
FLYNN: Well, one of the things that I recommend is you should not just leave your 401(k) contribution at the same level that it was. There's a lot of people who aren't even getting the full match, meaning that they're not taking advantage of the free money that their employer may be giving them.
So, if you're getting a raise -- and a lot of people are -- one of the things that we recommend is take half of that raise for yourself -- you earned it -- but take the other half and use that to bump up your 401(k) contribution. It's a painless way to kind of do that every year to try to get up to that maximum contribution level.
Those raises -- those amounts that you can put away that have been raised and a lot of people are nowhere near enough, as we talked about, that they need to put away. So it's an easy way to do that. I know we could all use more money but a lot of that money goes in pre- taxed.
FLYNN: So that's one of the things you don't want to do -- is don't miss out on raising your 401(k) contribution. Don't stop that systematic investing. It's the best thing to do during a volatile market, which is what we're -- what we're having.
ROMANS: I know. I always tell people, Doug, that this is when people start to really build wealth in a down market. The Dow -- or the S&P is down 20 percent this year --
ROMANS: -- but it was up 26 percent the year before. Up 19 percent the year before that. Up double-digits the year before that.
Yes, this is the worst year since 2008, but this is when you're picking up stuff on sale. I say --
FLYNN: And you're also still ahead -- you're still ahead of where we were before the pandemic --
ROMANS: Yes. FLYNN: -- and you've had a couple of ups and downs along the way. So you're absolutely right. Keep that money going. This is the best time.
ROMANS: Just for a perspective, folks, over the last five years, the S&P 500 is still up 45 percent in five years. That's a really nice return.
Doug Flynn, nice to see you. Have a Merry Christmas.
FLYNN: You, too.
ROMANS: Talk to you soon.
FLYNN: You, too.
ROMANS: All right, the Pittsburgh Steelers and the NFL are mourning the loss of a legend. Hall of Famer Franco Harris passed away.
Andy Scholes has more in this morning's Bleacher Report. Hey, Andy.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.
So, Franco Harris, like you mentioned, a Steelers legend. He won four Super Bowls for Pittsburgh. But most remember him for his part in arguably the most iconic play in NFL history -- the immaculate reception. And after that ball bounced off two players colliding, Franco snatched it into Terry Bradshaw -- fourth down pass inches before it hit the ground, and ran it in for a touchdown to beat the Raiders in the 1972 playoffs.
Now, current Steelers coach Mike Tomlin said yesterday they are heartbroken and look forward to honoring Harris this weekend.
(BEGIN VIDEO CLIP)
MIKE TOMLIN, PITTSBURGH STEELERS HEAD COACH: Well, I just admire and love the man. And there's so much to be learned from him in terms of how he conducted himself and how he embraced the responsibilities of being Franco, for Steeler Nation, for this community -- you know, for the Penn State followers. He embraced it all and did it with such grace and class, and patience, and time for people.
(END VIDEO CLIP)
SCHOLES: Yes, Franco Harris was 72 years old.
All right. In baseball, Aaron Judge capping off an incredible year by being named the 16th captain in Yankees history. The team has not named a new captain since Derek Jeter retired. He was on hand for the announcement.
And Judge said being a captain is an incredible honor that he does not take lightly.
(BEGIN VIDEO CLIP)
AARON JUDGE, NEW YORK YANKEES CAPTAIN: ...not only with great baseball players but great ambassadors of the game and great ambassadors of the New York Yankees -- you know, how they pride themselves on the field day in and day out. How they take pride in what they do off the field to represent this organization and represent these pinstripes.
(END VIDEO CLIP)
SCHOLES: All right. In college basketball, check out what Michigan State's Tom Izzo was coaching in last night. He looked like an elf -- and it was an angry elf at times, yelling at the officials. Izzo, though, was happy by the end of the game though as the Spartans beat Oakland 67-54. He could wear that at every game, really.
All right, and finally, the NFL's Pro Bowl rosters are out. The 13-2 Eagles leading the way with eight players selected for the game. The Commanders had three chosen, including their special team's ace, Jeremy Reaves.
And check out the moment Coach Ron Rivera told him the news.
(BEGIN VIDEO CLIP)
RON RIVERA, WASHINGTON COMMANDERS HEAD COACH: Congratulations. You're the Pro Bowl special team's guy. You're the starter.
JEREMY REAVES, SPECIAL TEAMER FOR THE WASHINGTON COMMANDERS: (Crying).
RIVERA: You earned it, young man -- everything you've done -- and I know your mom would be proud.
(END VIDEO CLIP)
SCHOLES: Ahh, man, what a moment for Reaves. His mom passed away last year. And he was drafted out of South Alabama three years ago but now he's been chosen by the fans, coaches, and his fellow players as the best in his position.
And, Christine, you could just see how much that moment meant to him. All the work he's put in and now --
ROMANS: I know.
SCHOLES: -- one of the best.
ROMANS: I love those stories. Never give up, you know? Work hard and never give up. It's like -- it's just like the mantra of the sports world.
Nice to see you, Andy Scholes.
SCHOLES: Yes. ROMANS: All right, coming up on "CNN THIS MORNING" -- excuse me -- reaction to Ukrainian President Zelenskyy's rousing speech to Congress. And the legend behind the legend. Don Lemon talks to the music industry giant behind the new movie on Whitney Houston. Clive Davis speaks just ahead.
(BEGIN VIDEO CLIP)
WHITNEY HOUSTON, SINGER-SONGWRITER: Singing "How Will I Know."
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